A Taiwanese firm stands accused of planning to give confidential chip designs from the US semiconductor company Micron to a Chinese one.

The case: According to a report in the New York Times, Micron is pushing ahead with a suit against Taiwan’s UMC and a Chinese chip maker, Fujian Jinhua Integrated Circuit Company. The suit alleges that former Micron employees took confidential memory chip designs with them when they joined UMC, which was planning to pass these on to the Chinese firm.

The cover-up: When Taiwanese police raided UMC’s offices, senior engineers quickly gave laptops and USB keys with compromising data on them to a junior employee to hide. Another staffer walked out of the building with an engineer’s phone, unaware the device was being tracked by police.

Why this matters: Tension over IP theft by Chinese companies is stoking a trade war between the US and China. This has already engulfed other Chinese firms like ZTE, which relies heavily on US components. China is determined to build a huge domestic chip industry to reduce its reliance on American and other foreign silicon tech. Pressure to create that industry could lead some to look for shortcuts—which is bound to cause even more legal friction in the future.

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Martin GilesI am the San Francisco bureau chief of MIT Technology Review, where I cover the future of computing and the companies in Silicon Valley that are shaping it. Before joining the publication, I led research and publishing at a venture capital firm focused on business technology. Prior to that, I worked for The Economist for many years as a reporter and editor, most recently as the paper’s West Coast-based tech writer.

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Martin GilesI am the San Francisco bureau chief of MIT Technology Review, where I cover the future of computing and the companies in Silicon Valley that are shaping it. Before joining the publication, I led research and publishing at a venture capital firm focused on business technology. Prior to that, I worked for The Economist for many years as a reporter and editor, most recently as the paper’s West Coast-based tech writer.

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